Local Government: Standards

Mark Oaten: To ask the Secretary of State for Communities and Local Government what assessment she has made of the effects of the changes made in response to the Local Government Efficiency Review led by Sir Peter Gershon on efficiency and practice in local government.

John Healey: During the 2004 Spending Review (SR04) period, councils were required to achieve 2.5 per cent. per annum efficiency gains, at least half of which had to be cashable (i.e. release cash resources that could be reallocated to meet local priorities or hold down council tax). This was in line with the efficiency target for the whole public sector and, for councils, amounted to an expectation for £3.0 billion gains by the end of 2007-08.
	Councils have reported achievement of efficiency gains significantly ahead of this target for the SR04 period, as shown in the following table:
	
		
			  Cumulative efficiency gains achieved by English councils between 1 April 2004 and 31 March 2008 
			  £ million 
			  Activity  Total gains  O f which :  cashable 
			  Service sectors   
			 Adult social services 786 612 
			 Social housing 359 309 
			 Environmental services 357 279 
			 Children's services 322 269 
			 Local transport 297 244 
			 Non-school education 205 170 
			 Culture and sport 152 110 
			 Supporting People 150 111 
			 Homelessness 61 44 
			
			  Crosscutting workstreams   
			 Corporate services 666 579 
			 Procurement 397 346 
			 Productive time 205 73 
			 Transactions 141 82 
			 Miscellaneous 248 219 
			
			 Total 4,345 3,447 
		
	
	The £3.447 billion cashable efficiency gains achieved by councils represent a saving worth £129 for the average Band D council tax property.
	Cuts in services do not count towards the figures reported above and, throughout the SR04 period, the Audit Commission's Comprehensive Performance Assessment has shown an upward trajectory for the scores awarded. In 2005, 73 per cent. of councils obtained the top scores (three or four stars) in CPA, and 57 per cent. were identified as performing "above or well above minimum requirements" in the Use of Resources assessment. By 2007, those proportions had risen to 83 per cent. and 85 per cent. respectively.
	To support councils in delivering these efficiencies, the Department set up a network of Regional Centres of Excellence (RCEs) which shared good practice and funded projects of importance to the region. The RCEs adopted a common system for measuring the benefits from the projects they funded and on average each pound invested released £5 of benefits to the public sector.
	Councils are also working with each other, and other parts of the public sector, to a much greater extent. By 2007, 54 per cent. were involved in joint commissioning of services (excluding health and social care)—up from 31 per cent. in 2004—and 38 per cent. shared a procurement function with another council.
	There are still opportunities for further efficiencies in local government, through the widespread adoption of better procurement, process improvement, collaboration and asset management, and a further £4.9 billion cash-releasing council efficiencies over the period from 2008-09 to 2010-11 is expected. The achievement of this target will rely on the strong foundation that councils have laid and will be supported by £384 million we are making available to support improvement, efficiency and innovation in local government.